Australia Redundancy Pay Calculator (NES) for Employees

About the Australia Redundancy Pay Calculator (NES) for Employees

In Australia the National Employment Standards (NES) in the Fair Work Act 2009 set the minimum redundancy pay an employer must pay when your job is no longer needed by anyone, or when the employer becomes insolvent or bankrupt. It is a number of weeks of your base rate of pay for your ordinary hours: 4 weeks after 1 year of continuous service, rising to 16 weeks at 9 years, then 12 weeks from 10 years (s119). There is none with less than 12 months of service, from a small business employer with fewer than 15 employees, or for casual, fixed-term and some trainee employees.

Enter your service as years and months or as exact dates, and your base pay for an hour, week, fortnight, month or year. The calculator applies the s119 table and each exclusion, works out your minimum notice (or pay in lieu) and checks the notice you were given, lists what else must be paid when the job ends, compares an employer’s offer and shows how much of a genuine redundancy payment is tax free under the Australian Taxation Office’s limit for the income year.

The NES redundancy pay table

The redundancy pay period depends on your period of continuous service with the employer on termination (Fair Work Act s119(2)):

• At least 1 year but less than 2 years: 4 weeks
• At least 2 years but less than 3 years: 6 weeks
• At least 3 years but less than 4 years: 7 weeks
• At least 4 years but less than 5 years: 8 weeks
• At least 5 years but less than 6 years: 10 weeks
• At least 6 years but less than 7 years: 11 weeks
• At least 7 years but less than 8 years: 13 weeks
• At least 8 years but less than 9 years: 14 weeks
• At least 9 years but less than 10 years: 16 weeks
• At least 10 years: 12 weeks

It is paid at your base rate of pay for your ordinary hours of work. Periods as a casual employee of the employer do not count (s119(3)), and neither do unpaid leave and unauthorised absences (s22(2)); paid leave, community service leave and stand-downs do. Fair Work Act 2009 · Fair Work Ombudsman: redundancy pay and entitlements.

Who does not get NES redundancy pay

• Less than 12 months of continuous service, measured when you are given notice or when the job ends, whichever comes first (s121(1)(a)).
• A small business employer: fewer than 15 employees at that time (s121(1)(b)). Every employee is counted — including you and anyone else being let go — but casuals only if they are regular casuals, and associated entities count as one employer (s23). The exemption does not apply when the employer is bankrupt or in liquidation (other than a members’ voluntary winding up) and became a small business because of job losses in the 6 months before, or caused by the insolvency (s121(4)).
• Casual employees, employees engaged for a specified period, task or season (unless that was done to avoid these rules), trainees employed only for a set period or the length of their training arrangement, and employees dismissed for serious misconduct (s123(1)).
• Apprentices, and employees covered by an industry-specific redundancy scheme in a modern award (s123(4)).
• Jobs that end through the ordinary and customary turnover of labour (s119(1)(a)). And when the work moves to a new employer — a new owner of the business or an associated entity — your service may carry over instead (s122(2)), and turning down a job there on substantially similar, no less favourable terms that recognise your service ends the right to redundancy pay (s122(3)).

The Fair Work Commission can also reduce the amount — even to nil — if the employer finds you other acceptable employment or cannot pay (s120). Fair Work Ombudsman: who doesn’t get redundancy pay.

Notice of termination

Your employer must give you written notice of your last day, at least (s117(3)):

• 1 week with not more than 1 year of continuous service
• 2 weeks with more than 1 year but not more than 3 years
• 3 weeks with more than 3 years but not more than 5 years
• 4 weeks with more than 5 years

plus 1 more week if you are over 45 and have at least 2 years of continuous service, all measured at the end of the day the notice is given. Instead of notice the employer can pay you in lieu, at your full rate of pay — with loadings, allowances, overtime and penalty rates — for the hours you would have worked (s117(2)(b), s18). If the time from the notice to your last day is shorter than the minimum, the employer must pay in lieu for the rest (s117(2)): with exact dates, the calculator checks it. Notice pay is paid on top of redundancy pay. Casual employees, those on a specified period, task or season, trainees employed only for their training, and some daily-hire building and meat industry employees are not covered by these notice rules (s123). Fair Work Ombudsman: who doesn’t get notice.

What else is paid when the job ends

• Untaken annual leave, at the amount you would have been paid had you taken it (s90(2)) — the Australia Annual Leave Calculator works out your balance and its value.
• Long service leave, under your state or territory’s long service leave law (or an instrument preserved by s113), may be payable when the employment ends.
• Wages and other amounts owed up to your last day. Many awards set a deadline: the Clerks—Private Sector Award (clause 17.5) and the General Retail Industry Award (clause 18.4) require final pay within 7 days.
• Unused personal/carer’s leave is not paid out: the NES has no payout rule for it.

Tax on a genuine redundancy payment

Part of a genuine redundancy payment is tax free: up to a base amount plus an amount for each whole year of service, both indexed every income year (Income Tax Assessment Act 1997 s83-170). The rest is taxed as an employment termination payment. To count, you must be dismissed because your position is genuinely redundant, before pension age (or an earlier age or length of service at which your job would have ended), with no arrangement to employ you again; only the part above what you would have received for resigning counts, and if the dismissal is not at arm’s length, no more than an arm’s-length amount (s83-175). A payment in lieu of notice can be part of it; payments for unused annual leave, leave loading and long service leave are not (s82-135, ATO: genuine redundancy payments).

The calculator holds the ATO’s tax-free limits for recent income years: choose the year you are paid in, or enter the two amounts for another year. Income Tax Assessment Act 1997.

Is it a genuine redundancy?

A dismissal is a genuine redundancy only if the employer no longer needs the job done by anyone because of changes in its operational requirements, and it followed any consultation duty in the award or enterprise agreement; it is not genuine if redeploying you within the business or an associated entity would have been reasonable (s389). If you think it was not genuine, you may be able to apply to the Fair Work Commission for an unfair dismissal remedy — within 21 days after the dismissal takes effect (s394). Fair Work Commission: redundancy · unfair dismissal.

Other countries

In the UK, the UK Redundancy Pay Calculator works out statutory redundancy pay by age and service. For the Gulf, the Gulf End-of-Service Gratuity Calculator applies the UAE, Saudi, Qatari, Omani, Bahraini and Kuwaiti labour laws.

Limitations

• The NES minimum only. An award, enterprise agreement or employment contract can give more; enter the employer’s offer to compare.
• For national system employees under the Fair Work Act. Some state and local government employees, and some employees of unincorporated employers in a state that has not referred its workplace powers to the Commonwealth, are covered by a state system instead.
• The service you enter is treated as continuous. A transfer of business, casual conversion, breaks and earlier redundancy payments can change what counts — ask the Fair Work Ombudsman.
• Exact dates count both your first and your last day. For a date right on a boundary (12 months, or a notice band), check with the Fair Work Ombudsman.
• The tax section works out only the tax-free part, from the ATO’s limit for the income year you choose; the tax on the rest depends on your other income and the ETP caps.
• To cross-check, the Fair Work Ombudsman has its own Notice and Redundancy Calculator.
• An estimate for information, not legal advice. The Fair Work Ombudsman and the Fair Work Commission give free information.

Privacy

Everything happens in your browser. What you enter or open here is not uploaded or stored by MySmartCoPilot.